Bridging loan to purchase BTL in unlettable condition
We were approached by a couple of clients, cousins, who together own a few buy to let properties. They approached us for help in sourcing a buy to let mortgage to purchase a three-bed mid-terraced house in Kent.
We worked with the pair to find an appropriate product and submitted an application. Unfortunately, the valuation report concluded that the house was in too poor a state to qualify as security for a buy to let mortgage (which are only granted on immediately habitable dwellings). It needed to be.
Keen to continue with the purchase anyway, we suggested that the clients apply for a short term loan sufficient to buy and refurbish the house which needed to be re-wired and required a new kitchen and bathroom. When ready to let, they could then re-apply for a buy to let mortgage.
The clients agreed and so we researched a variety of suitable finance options for them. In light of their lack of experience with refurbishment projects, the clients chose a product that offered a great deal of flexibility - a 12-month maximum term and no ERCs or exit fees giving them the freedom to remortgage or sell the property without penalty as soon as they are ready.